Preliminary figures for FY 2010: Good performance by the DZ BANK Group – growth opportunities exploited systematically
||Earnings before tax (IFRS) almost doubled to EUR 1.6 billion
||Good operating performance in the DZ BANK Group and DZ BANK AG
||Significantly strengthened capital base: tier 1 ratio reaches 10.6 per cent
||Successful cooperation with the cooperative banks
||Dividend increases by 20 per cent to 12 cents per share
||DZ BANK's CEO Kirsch: "We got off to a good start in 2011“
||DZ BANK AG to hire 50 Cooperative Financial Group trainees
On the basis of its preliminary (IFRS) figures, the DZ BANK Group reported earnings before tax of around EUR 1.6 billion and thus almost doubled its earnings compared to the previous year (EUR 836 million).
"The year 2010 was one of intensive and successful cooperation with the local cooperative banks. We made systematic use of growth opportunities in all business segments. This has paid off," said Wolfgang Kirsch, CEO of DZ BANK AG. "The past financial year shows that we are excellently positioned in the market. This lends us tail wind to chart further vigorous growth and to overcome the regulatory challenges, which we shall do under our own steam," continued Kirsch.
The good earnings performance in the financial year 2010 also needs to be seen in the context of the demanding economic conditions. On the one hand, Germany's strength in the export markets has had a positive impact on the German economy. "The DZ BANK Group benefits from this. In this environment, our competitive products reported gratifying sales among private and corporate clients," said Kirsch. On the other hand, the continuing speculation about the viability of some European countries' national debt levels and the resultant haircuts on government bonds temporarily had a negative impact.
Results at the DZ BANK Group
DZ BANK AG was able to expand its lendings to the SME segment significantly in the financial year 2010. The number of new loan applications rose by 17 per cent, in the development-loan business the volume of new lendings increased by almost 50 per cent to chart a new record. DZ BANK AG's private banking operations also turned in a very successful performance. The sales volume of investment certificates increased from EUR 3.3 billion to EUR 3.7 billion.
At the subsidiaries the new home loan and saving business at Bausparkasse Schwäbisch Hall increased by almost 14 per cent to EUR 28.7 billion. More than 900,000 contracts were signed, which was 100,000 up on the previous year. The market share increased from 28.1 to 28.6 per cent. The R+V Versicherung sub-group also continued on its growth course in all insurance segments with premiums up 5.5 per cent to EUR 11.1 billion. Union Investment increased the volume of assets under management from around EUR 166 billion in the previous year to a new peak of more than EUR 177 billion in 2010. TeamBank increased the loan portfolio for its consumer loan product "easyCredit" by around 10 per cent to EUR 6.2 billion and reported growth that was significantly higher than that in the market as a whole. DZ PRIVATBANK also got off to a good start, increasing the volume of assets under management by EUR 0.4 billion to EUR 10.5 billion.
The net interest income increased in the DZ BANK Group compared to the previous year by 14 per cent to EUR 2.7 billion. This was mainly due to the development of DZ BANK AG's net interest income – excluding income from long-term equity investments – which increased by around 37 per cent to EUR 415 million. "We benefited especially from the recovery in credit demand and together with the local cooperative banks we achieved significant increases in unit and volume sales in the traditional syndicated loans business. In addition, the promotion of renewable energies led to a significant increase in the volume of new lendings in the development loan business,“ said Kirsch. In addition, TeamBank, DG HYP and the DZ PRIVATBANK Group reported substantial increases in net interest income.
Risk provisioning for lending operations totalled EUR 258 million in the DZ BANK Group in 2010 (previous year: EUR 683 million), reflecting the economic recovery as well as a consistent risk policy.
Net commission income increased significantly in the DZ BANK Group, up 26.6 per cent to EUR 1.1 billion (previous year: EUR 879 million). The main driving forces behind this included the strong growth in the Union Investment Group due to the significant increase in the volume of assets under management. In addition, net commission income increased above all in the DVB sub-group and at DZ BANK AG.
At EUR 1.02 billion the DZ BANK Group's trading result almost matched the year-earlier level of EUR 1.07 billion. This was mainly attributable to the trading result of EUR 990 million reported by DZ BANK AG.
At - EUR 708 million gains and losses on investments were around 12 per cent lower than in the previous year (- EUR 635 million). This result includes the impairments on ABS positions with which we have made ample provision for the ABS portfolios.
The net income from insurance activities increased from EUR 314 million in the previous year to EUR 406 million. This increase was due primarily to significantly improved gains on investments in the R+V Versicherung sub-group.
At EUR 2.6 billion the administrative expenses in the DZ BANK Group were 4.3 per cent higher than in the previous year (2009: EUR 2.5 billion). "While remaining as cost-sensitive as ever, the DZ BANK Group also invested systematically in growth areas in 2010 ," said Kirsch. These investments included, for example, hiring new employees and spending on marketing activities at Union Investment as well as the start-up costs incurred for expanding Private Banking activities.
The total assets of the DZ BANK Group declined as at 31 December 2010 by 1.3 per cent to EUR 383.5 billion (previous year: EUR 388.5 billion).
The tier 1 ratio for the DZ BANK Group as at 31 December 2010 was at 10.6 per cent
(31 December 2009: 9.9 per cent).
The payment of a dividend of 12 cents per share (previous year: 10 cents) is to be proposed to the AGM.
"We got off to a good start in the new financial year," said Wolfgang Kirsch. The pace of the economic recovery has slowed and the uncertainty surrounding the level of debt in some euro-area states continues. "But we assume that the business outlook for the DZ BANK Group will improve yet further in 2011. The many and varied market initiatives we have launched jointly with the local cooperative banks are making a major contribution here," he added.
In order to further extend its collaboration with the local cooperative banks, DZ BANK is initially to hire 50 university graduates as Cooperative Financial Group trainees. These will be trained in a joint programme run together with the local cooperative banks for their future duties in the cooperative organisation.
The good initial business situation and the clear strategic orientation also place the DZ BANK Group in a strong position to face the future regulatory challenges. "The overall impact of the regulation is hard to assess as yet for a large and broadly-based financial group. We need clarity soon because we seek to fulfil our mandate as a bank for the real economy and wish to grow," concluded Kirsch.
Speech Wolfgang Kirsch (100 KB)
Presentation (627 KB)
Preliminary (IFRS) P&L DZ BANK Group